In this article, we will discuss what is a request for offer, what are its essential components, what things to be included in an ideal request for offer, what all purposes it is used for, and what things must be kept in mind while drafting an RFO.
What is Request for offer
So, a request for offer is a document of the procurement agency or we can say buying organization, which they issue to invite offers from various potential vendors. When we go into the technicalities of the definition we find that “It is a document inviting prospective vendors to supply deliverables to the issuing organizations which contain specifications and agenda herewith.
RFO is a shortened form of a request for offer and it is similar to a Request for proposals (RFP), Request for Quotations (RFQ), etc. It is a term that is mostly used with procurement and sourcing. It is in the form of a questionnaire, designed for a transparent exchange of information between both parties i.e. buyer and seller. The procurement agency mentions its requirement and all the other necessary details so that the vendors can easily provide solutions and criteria for the solutions as per the resources available to them.
When talking about the difference between RFO and RFQs and RFPs, the main difference is that an RFO has more open-ended and vendor-based questions which are very subjective to each vendor. It does not have a set pattern of questions and hence it assesses the responses without any prior bias or any undue advantage. The subjective criteria make the assessment a bit tough, but the result is by the goals.
Need for an RFO
When you face some problems in the functioning or working of a particular project and you wish to have solutions from different vendors then RFOs are the best way to do that. But you have to provide enough details to the potential vendors and some parameters based on which they can decide whether or not to submit their offer.
The process of drafting is very similar to other requests like RFPs, RFQs, RFX, etc. It can be categorized into some prominent steps for ease of understanding what is a request for offer. These are as follows:
Understanding needs and requirements
This stage starts with the mere idea of drafting a request for an offer. The needs and requirements are explicitly stated in the RFO, the drafting process starts from reading those points thoroughly itself. We first list down our expectations and for that, we have to have a clear understanding of how we plan to achieve the desired deliverables of the tender. At the same time, we have to keep in mind we meet all the parameters, the basis on which the RFO will be judged.
For a successful implementation of the plan we need to have a set timeline for the various deadlines. This includes meeting the deadline for follow-up questions from vendors, and at last bid submission.
Drafting the RFO
When you are finally fully aware of what is expected from you, you start drafting the RFO. In it, you try to inculcate all the necessary information like goals, scope, timeline, and background of the project.
Submitting the RFO
There are two ways of submitting the RFOs, either you can send it in hard copy or you can submit it online. This depends on what the tendering organization requests.
This was all about the basics of RFOs, what are they, why we need them, and what is the process. Some of the software like RFP Software is a great way to deal with these RFOs and procurement cycles. These days’ companies are moving towards these kinds of software to suit their needs.
Bidfast is a RFP Response and Tender Bid Management Software that can help you with your everyday tendering needs. It can prepare a Request for Offer document within minutes. With its smart document management system you can have a shorter turnaround for your proposals and increase your chances of winning.